Minip Cengage Learning 5: Assignment - Time Value of Money Term Answer Discounting Time value of money B. Amortized loan c. Ordinary annuity D. Annual percentage rate kkkk Annuity due F Description A6% return that you could have earned if you had made a particular investment A series of equal (constant) cash flows (receipts or payments that are expected to continue forever A concept that maintains that the owner of a cash flow will value oferently, depending on when it occurs An interest rate that ritects the ritum required by a fender and paid by a borrower expressed as a percentage of the principal borrowed A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate. A cash flow stream that is created by an investment or loan that requires its cash flows to take place on the last day of each quarter and requires that it last for 10 years A cash flow stream that is created by lease that requires the payment to be paid on the first of each month and a lease period of three years One of the four major time value of money terms the amount to which an individual cash now or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest. A type of security that is frequently used in mortgages and requires that the loan payment contain both interest and loan principal A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term Perpetuilty Future Value Amortization schedule 1. Opportunity cost of funds 1 Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of an annuty due PMTX ((1+y)" - 11/1) PMT (1-(1/(1+)(1) PHTX (1+1-1)1+1 PV)